A collection of newsworthy information as reported from newspapers, magazines, and blogs.

Wednesday, September 19, 2012

It's Always a Bad Idea to Disparage Voters

"And what I said on election night was,
even though you didn't vote for me, I hear your voices and I'm going to work as
hard as I can to be your president." ~ President Obama"I'm not going to get" votes from Americans
who believe government's job is to redistribute wealth."~Mitt Romney A huge swath of the people who don’t pay federal
income taxeslive in the Deep
South or are elderly.President Obama is unpopular with both groups.And, both groups will likely vote for Mitt Romney."Romney seems to have contempt not just for the
Democrats who oppose him, but for tens of millions who intend to vote for him."
~ Bill Kristol“In 1969, Treasury Secretary Joseph Barr announced
that 155 households with incomes over $200,000 paid no income tax. Outrage
spawned the birth of the Alternative Minimum Tax(AMT) to ensure that rich Americans
paid their fair share. We established
the Alternative Minimum Tax to ensure that the rich pay taxes, like the rest of
us. Today we have thousands of
millionaires paying no taxes, and this is with the Alternative Minimum Tax in
place. If these people are acting legally, then they have every right to
lawfully reduce their tax burden. But we worry about all these people who are
zeroed out. There are as many people
making between $100,000 and $200,000 a year as there are with incomes in the
$20,000s. One third of the country makesunder $20K. Half the country makes between $20K and $100K. If you report cash
income in the triple digits, then congratulations! Your cost-of-living
notwithstanding, you're in the top sixth of earners.”

You could say that the entitlement
state is growing at an unsustainable rate and will bankrupt the country. You
could also say that America is spending way too much on health carethe elderly and way too little on
young families and investments in the future.

But these are not the sensible
arguments that Mitt Romney made at a fund-raiser earlier this year. Romney, who
criticizes President Obama for dividing the nation, divided the nation into two
groups: the makers and the moochers. Forty-seven percent of the country he
said, are people “who are dependent upon government, who believe they are victims,
who believe the government has a responsibility to take care of them, who
believe they are entitled to health care, to food, to housing, to you name it.”

This comment suggests
a few things. First, it suggests that he really doesn’t know much about the
country he inhabits. Who are these freeloaders? Is it the Iraq war veteran who
goes to the V.A.? Is it the student getting a loan to go to college? Is it the
retiree on Social Security or Medicare?

The people who receive the disproportionate share of
government spending are not big-government lovers. They are Republicans. They
are senior citizens. They are white men with high school degrees. As Bill
Galston of the Brookings Institution has noted, the people who have benefited
from the entitlements explosion are middle-class workers, more so than the
dependent poor. There’s no way thecountry will trust the Republican Party to reform the welfare state if that
party doesn’t have a basic commitment to provide a safety net for those who
suffer for no fault of their own.Poetic Justice

Thanks to numerous
tax breaks and loopholes, corporations rarely pay the full corporate income tax
rates. Many of the nation’s largest
companies are paying little or no federal taxes at all. Corporations have been paying a lower share
of our nation’s total taxes. Corporate
taxes fell from 26.4 percent of total tax revenue in 1950 to just 7.4 percent
of total tax revenue in 2010. During this same period, personal income,
Social Security and Medicaretaxes
increased from 51.4 percent to 83.8 percent of total tax revenue. A 2011 report by Citizens for Tax Justice and
the Institute on Taxation and Economic Policy found that 78 of 280 of the
nation’s largest and most profitable companies paid no federal income taxes in
at least one of three years.Consider the 76 million peoplewho don't legally owe individual
income taxes in 2011 (please, please note: does not include payroll, excise,
state and local taxes). The vast majority of this group was poor. They didn't
owe individual income taxes because they didn't owe a lot of money to start,
and various exemptions, like the earned income.
There are three buckets of factors that can bring taxable income down
from $1 million to zero. One is tax tricks. The IRS should crack down more. Two
is relying heavily on investments. The administration can try to level taxes
for earned income and investment income. Third is great misfortunes. When
investments lose significant income, a house or business is destroyed (i.e. a
casualty loss), or a family member gets sick and incurs high medical costs for
the self-insured, all these things chop away at taxable income and eventually
bring a millionaire's income taxes to zero. tax credit, wiped out the rest.